WBD CFO: Expanded Content Distribution Reduced 2022 Streaming Losses by $500 Million

Warner Bros. Discovery CFO Gunnar Wiedenfels said the company’s pivot away from predecessor WarnerMedia’s “streaming-only” mindset helped reduce direct-to-consumer operating losses by $500 million to $217 million on revenue of more than $2.45 billion in 2022. The business unit is projected to break even in Q1 2024.

The revised mindset includes pulling content out of HBO Max to license to third-party platforms and emerging channels such as AVOD and free ad-supported streaming television (FAST).

Earlier this year WBD licensed 2,000 hours of programming, including “Westworld,” to the Roku Channel and Fox-owned Tubi.

Speaking March 8 at the Morgan Stanley Technology, Media and Telecom Conference in San Francisco, Wiedenfels said the past decade of streaming was fueled by zero cost capital, which has changed.

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“There’s a reason why entire the industry over years has looked at adequately-priced exploitation windows to optimize the return on investment. And we’re returning to that,” he said, alluding the fiscal impact legacy theatrical releases can have down the distribution channels.

He said the new management thinking includes leaving select movies in theaters longer than they would have remained previously at the box office, before transitioning to HBO Max.

The CFO contends that by refocusing content on specific distribution channels depending on individual consumer groups will enhance revenue opportunities. He believes the streaming goal should be that 20% of the content drives 80% of the revenue. The remaining content should be distributed elsewhere.

“We want to using all cash registers available to us and streaming [is still] important to us,” Wiedenfels said.

The executive contends one of his main priorities is to set up the company in a way that it can harness all the data being generated across various distribution platforms.

“So, we come up with the best [windowing] decisions,” he said. “We know we want to do what’s best for the whole company and not just one business unit.”

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